Self assessment and US dividends 24 January at 5:44PM in Cutting tax 7 replies 90 views

iwant2asave

Hello,

Please can you help with the below scenario from a tax/self assessment point of view : 

The only shares held are about $500 of US shares which have received dividends that had withholding tax of 15% already taken off at source.  No other UK or foreign shares held.

I am unclear if the dividends from these shares are liable to both US withholding tax and UK tax or neither or just US withholding tax.  Please could someone help clarify.

Sam

eskbanker

If they're the only dividends you've received then they fall within the (UK) dividend allowance of £2K, so no UK tax due:

https://www.gov.uk/tax-on-dividends

iwant2asave

eskbanker said:

If they're the only dividends you've received then they fall within the (UK) dividend allowance of £2K, so no UK tax due:

https://www.gov.uk/tax-on-dividends

Thank you.  So no UK tax due.  So regarding the withholding tax already paid, is this reclaimable or is it liable to US withholding tax?  Thanks,

purdyoaten2

iwant2asave said:

eskbanker said:

If they're the only dividends you've received then they fall within the (UK) dividend allowance of £2K, so no UK tax due:

https://www.gov.uk/tax-on-dividends

Thank you.  So no UK tax due.  So regarding the withholding tax already paid, is this reclaimable or is it liable to US withholding tax?  Thanks,

Not reclaimable in the U.K. You would normally receive a credit of the tax paid against the tax due on THAT income in the U.K. As this is NIL in this case, it is lost.

Jeremy535897

purdyoaten2 said:

iwant2asave said:

eskbanker said:

If they're the only dividends you've received then they fall within the (UK) dividend allowance of £2K, so no UK tax due:

https://www.gov.uk/tax-on-dividends

Thank you.  So no UK tax due.  So regarding the withholding tax already paid, is this reclaimable or is it liable to US withholding tax?  Thanks,

Not reclaimable in the U.K. You would normally receive a credit of the tax paid against the tax due on THAT income in the U.K. As this is NIL in this case, it is lost.

There is no claim under the double tax agreement either, as rate of tax the US is entitled to charge in these circumstances is 15%.

iwant2asave

Got it thanks guys - so basically I guess US withholding tax paid on dividends is not reclaimable as part of Foreign tax credit relief on self assessment.

Jeremy535897

It would be, if you had paid UK tax on them.

iwant2asave

Jeremy535897 said:

It would be, if you had paid UK tax on them.

Ok... thanks for clarifying that I am liable for US withholding tax and US tax not reclaimable as foreign tax credit relief on US tax paid.